The U.S. Department of Labor has adopted the Primary Beneficiary test for deciding whether an intern must be paid as an employee or can be treated instead as an unpaid intern. This brings the DOL into alignment with a number of circuit courts, including the Sixth, Ninth and Eleventh. The Primary Beneficiary test is generally seen as more favorable towards employers and students who wish to be treated as unpaid interns.

The Primary Beneficiary test asks, given the “economic reality” of the relationship, whether the putative intern or the company is the real “primary beneficiary” of the relationship. When asking that question, the DOL and courts that follow this test consider the following seven factors (quoting new DOL Fact Sheet #71):

The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.

The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.

The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.

The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.

The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.

The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.

The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

As previously reported in this blog, Congress has already addressed sexual harassment reforms, including by implementing significant restrictions on the tax treatment and ability to keep confidential settlements and awards related to sexual harassment. Now, as state legislatures begin convening, it is expected that reform efforts related to sexual harassment will be debated at at the state level. Already proposals have been put forth in multiple states. Topics likely to be debated include the following:

State level restrictions on the tax treatment of settlements and awards involving sexual harassment.

The ability to include confidentiality clauses in settlements involving sexual harassment.

Enhanced training obligations.

Enhanced reporting procedures and protections.

It is anticipated that such debates will involve not only private workplaces but also government workplaces, and especially the state legislatures themselves as workplaces.

In Colorado, our legislature just convened its 2018 session, and already one bill is pending to enhance training requirements for early childhood providers.

In a recent post, this blog discussed an Eleventh Circuit case on the Shifting Reasons doctrine, in which a plaintiff argues that their case warrants a trial because the employer has provided shifting reasons, suggesting the real reason was an unlawful intent. As noted in our prior blog post, this is one of the most common arguments plaintiffs make in response to a motion for summary judgment.

Now it’s the Eighth Circuit’s turn, and like the its sister, the Eleventh Circuit, the Eighth Circuit rejected the plaintiff’s claim of shifting reasons, holding that an employer can “elaborate” on its reason, provide additional examples or flesh out its reason, without it being considered “shifting reasons.”

(I)t is well-established that a employer may elaborate on its explanation
for an employment decision. Evidence of a substantial shift in an employer’s explanation for a decision may be evidence of pretext, but an elaboration generally is not.

(Citations omitted.)

In this case, when Rock-Tenn fired Rooney, it told him the reason was poor performance with regard to his “interaction with coworkers” and “failure to support” one particular client. Then after he sued, it gave as additional examples his (alleged) poor performance as to other clients. The Court held that was not a shift in the reason for his discharge, just further explanation.

These two Circuit Court decisions illustrate how common the Shifting Reasons doctrine is used by plaintiffs and the need for plaintiffs to show a true shift in the reason, not simply an elaboration of the reason.

In a continuing trend of reversing Obama-era precedents, the Trump Board has signaled it will soon be rescinding the prior administration’s 2014 election rules. Those rules govern the election for (or against) unions to be recognized as a group of workers’ exclusive bargaining agent. The Obama-era rules greatly expedited the timeline for such an election and included a number of substantive changes that many commentators contend infringe on worker rights and employer rights. These controversial rules are known as — depending on the speaker’s perspective — the “expedited” or “ambush” or “quickie” election rules.

The NLRB posted a Request for Information on its website and in the Federal Register, December 14, 2017, inviting comment on three questions involving the rules:

Should the 2014 Election Rule be retained without change?

Should the 2014 Election Rule be retained with modifications? If so, what should be modified?

Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Representation Election Regulations that were in effect prior to the 2014 Election Rule’s adoption, or should the Board make changes to the prior Representation Election Regulations? If the Board should make changes to the prior Representation Election Regulations, what should be changed?

The deadline for responses is February 12, 2018. Responses may be submitted at that website (limit 250 characters), where they will be posted immediately.

Continuing its trend of reversing Obama-era precedents, the NLRB has reversed 2011’s Specialty Healthcare, which had recognized the possibility of a union representing only a portion of a bargaining unit, i.e., a micro-unit. Micro-units were favored by unions when they felt they were able to persuade a majority of the smaller group to vote Yes for union representation, even though the union might not be successful in convincing the entire bargaining unit to so vote. It was seen as a way for the union to gain a foothold in an otherwise unreceptive workforce. In this case, the Board reversed Specialty Healthcare.

As previously reported on this blog, with a now Republican majority on its Board, the NLRB has begun reversing course on a number of issues. On December 14, 2017, the Board overruled its 2004 precedent in Lutheran Heritage Village-Livonia, which had suggested that workplace civility rules violated the NLRB. This case confirms that the National Labor Relations Act does not guaranty to workers the right to be uncivil.

In this case, Boeing had a rule that prohibited the use of cameras, including in cell phones, on company property. Boeing asserted the reasons for its policy included the protection of highly sensitive, classified information, as well as the prevention of terrorist activities.

Under Lutheran Heritage, the Board had analyzed such policies by asking whether an employee would “reasonably construe” them as chilling the employee’s right to engage in protected concerted activity under Section 7 of the NLRA. In this case, the Board held that the “reasonably construe” standard was too narrow, “single-minded,” and did not take “into account any legitimate justifications” for the policy. The Board noted the “reasonably construe” standard had been applied “to invalidate facially neutral work rules solely because they were ambiguous in some respect” (emphasis in original).

Instead the Board will first ask if the policy is “facially neutral” and, if so, whether “when reasonably interpreted,” it “would potentially interfere” with Section 7 rights.

The Board explained this new approach will produce three categories of rules:

“Category 1” rules that are lawful. These include Boeing’s no-camera rule, as well as “harmonious interactions and relationships” rules and general “civility” rules.

“Category 2” rules whose lawfulness will depend on the circumstances.

“Category 3” rules that are unlawful because their constraint on Section 7 rights “is not outweighed by justifications associated with the rule. An example of a Category 3 rule would be a rule that prohibits employees from discussing wages or benefits with one another.”

Continuing its trend of reversing Obama-era NLRB decisions, the Trump Board has reversed one of the most controversial, the Board’s 2015 decision, Browning-Ferris Industries, in which the Board had held that mere proof of indirect or even potential control was sufficient to create a joint employer relationship. In this decision, Hy-Brand Industry Contracts, Ltd., the Board returns to requiring proof of actual control by the putative joint employer.

The impact of the Board’s decision on the pending legislation regarding the Joint Employer doctrine, previously reported in this blog is yet to be determined.

UPDATE: On February 26, 2018, the Board vacated the foregoing decision in Hy-Brand due to a purported conflict of interest bearing upon one of its members. On June 5, 2018, the Board announced it will, instead, issue a proposed rule addressing the Joint Employer doctrine. On June 6, 2018, the Board then refused to reinstate the foregoing decision, apparently leaving the issue instead to be determined as part of the forthcoming rulemaking process.

As previously reported here in this blog, the Trump Board (NLRB Boards are often colloquially but not pejoratively referred to by the President during their term) has begun overruling Obama-era precedents. Further reversals are anticipated. Curious which Obama-era NLRB precedents are likely to be reversed?

NLRB General Counsel Robb issued a controversial memo, shortlisting the cases he thinks most warrant attention. Indeed to call it a shortlist is a stretch. The General Counsel lists 26 categories, that range from employee access to email, to protections for section 7 rights, obscene and harassing behavior, off-duty access to property, the Weingartenright to have a representative present, rights of employees during contract negotiations, successorship and of course the joint employer doctrine, unilateral changes consistent with past practice, information requests during the processing of a grievance, dues check-offs, remedies, deferral, and, well, the list goes on, as will employers’ need to stay tuned to forthcoming developments at the Board.

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Shifting reasons and temporal proximity are two of the most common arguments in discrimination cases. Employees often (correctly) argue either or both as part of efforts to withstand a motion for summary judgment. A recent Eleventh Circuit case illustrates how these arguments work.

An employer may file a motion for what is called “summary judgment” when it believes that the undisputed evidence requires dismissal of a plaintiff’s claims. In employment discrimination cases, when an employer has given a legitimate nondiscriminatory reason for the adverse employment action at-issue (discharge, demotion, etc.), a plaintiff most prove an issue of fact suggesting that the employer’s reason is “pretext” for discrimination. The plaintiff need not convince the judge of discrimination, merely produce sufficient evidence to support a jury verdict, assuming the jury were to believe that evidence. Two common ways that employees try to establish pretext are to show that the employer gave shifting reasons and that there was a temporal proximity. This case illustrates both arguments.

When an employer gives shifting reasons, it can suggest that its failure to provide a consistent statement of its reasoning suggests its reasons were in fact pretext for discrimination. Here, the plaintiff made such an argument. The Eleventh Circuit disagreed, noting that the employer’s reasons didn’t shift, its supervisors just didn’t articulate the company’s reasoning clearly. But, as unclear as the supervisors might have been, they all said the same basic reason: Her performance. Likewise, one supervisor gave an extra reason (“the needs of the Center”), but that reason was also related to performance. Thus, the Eleventh Circuit rejected the argument that the employer’s position had shifted.

(H)ere Cappetta’s supervisors consistently gave verbal and written warnings about her workplace violations. The fact that one supervisor also pointed to the needs of the Center does not undermine its consistent concern about her attendance issues, attitude problems, and cash handling violation.

Next she argued that there was a temporal proximity (a closeness in time) between an MRI she’d undergone for her disability and her suspension. The Eleventh Circuit agreed that the timing was certainly close and might have suggested more than coincidence; however, when a plaintiff establishes a temporal proximity, the employer can respond that there was no coincidence, rather, there was an intervening act that produced the adverse employment action. Here, the employer argued that was an incident with her handling of cash. The Eleventh Circuit agreed that intervening act broke the alleged temporal proximity.

Second, Cappetta argues that the close temporal proximity between her MRI and her suspension demonstrates pretext. We have held that close temporal proximity can be evidence of pretext, but it is not necessarily sufficient on its own. Hurlbert, 439 F.3d at 1298 . Cappetta has presented no evidence, other than closeness in time, that the MRI or her diagnosis impacted the Center’s decision. And the remaining evidence actually suggests otherwise. The day she had the MRI taken was the same day as the cash handling violation, and the forced leave came after weeks of documented concerns about her attendance and attitude. Given that evidence, the close temporal proximity between her diagnosis and her termination is insufficient to rebut the Center’s reasons for her termination.

Lacking evidence of pretext, the Eleventh Circuit affirmed summary judgment in favor of the employer. HR professionals interested in temporal proximity and shifting position arguments may find the Cappetta case a helpful, brief illustration.

As reported here, the Trump administration, earlier this year, completed nominations to the NLRB sufficient to constitute a Republican majority of the Board. As predicted, the new Republican-led Board has begun overruling Obama-era precedents.

The first case, UPMC, involves the Board’s procedural requirements for accepting settlement agreements. Historically an administrative law judge (ALJ) at the Board was authorized to accept settlement agreements if “reasonable” under a set of factors articulated in Independent Stave, 287 NLRB 740 (1987).

In 2016, the Obama Board (NLRB Boards are often colloquially and non-pejoratively referred to by the last name of the President at their time) rejected the Reasonableness standard, saying instead an ALJ was authorized to accept settlement agreements only if they provided a “full remedy” for all violations alleged in the complaint. United States Postal Service, 364 NLRB No. 116 (2016).

What’s the difference between the Reasonableness standard and the Full Remedy standard? The facts of this case, UPMC, illustrate. Here, a complaint was filed against UPMC and its affiliate, Presbyterian Shadyside, alleging violations committed by Presbyterian Shadyside. The allegations alleged that UPMC was liable as a joint employer for Presbyterian Shadyside’s violations. Presbyterian Shadyside negotiated a settlement in which it promised to fully remedy any violations; however, the settlement required the Board to dismiss the joint employer allegations against UPMC. Instead of agreeing to be held a joint employer, UPMC promised to guaranty Shadyside’s performance of the settlement.

The ALJ accepted the settlement, but the Board’s General Counsel and the Charging Party objected to how he did so, arguing that UPMC should have been required to admit to being a joint employer, instead of a mere guarantor, in order to provide a “full remedy.” The ALJ held, and in this case, the Board agreed that the settlement with UPMC being a guarantor provided the same effective relief and that it did so more quickly than continuing to litigate the joint employer issue.

UPMC’s remedial guarantee is as effective as a finding of single-employer status. As noted above, when a parent company is found to be a single employer with its subsidiary, the parent company is liable for the subsidiary’s unfair labor practices to the same extent as the subsidiary. The practical aim of the General Counsel’s single-employer allegation in this matter, then, is to hold UPMC responsible for Presbyterian Shadyside’s unfair labor practices along with Presbyterian Shadyside.

In overruling the Obama Board’s “full remedy” standard, the Board gave a preview of how it will overrule other decisions in the coming months and years, saying the Obama-era case had “imposed an unacceptable constraint” and “was an ill-advised and counterproductive departure from longstanding precedent.”

Furthermore, we overrule Postal Service, and we agree with the dissenting views of Chairman (then-Member) Miscimarra in that case, who pointed out that Postal Service imposed an unacceptable constraint on the Board itself, which retained the right under prior law to review the reasonableness of any respondent’s offered settlement terms that were accepted by the judge. We believe the “full remedy” standard adopted by the Board in Postal Service was an ill-advised and counterproductive departure from longstanding precedent. As illustrated by the instant case, adhering to the Postal Service standard would predictably cause incalculable delay in resolving the alleged violations, while potentially jeopardizing the prospect of obtaining any remedy against UPMC. Today, we return to the Board’s prior practice of analyzing all settlement agreements, including consent settlement agreements, under the “reasonableness” standard set forth in Independent Stave, 287 NLRB 740 (1987)

While UPMC involves a relatively dry procedural issue, it foreshadows a wave of decisions by which the Trump Board will overrule a number Obama Board decisions.